European Electricity Market Reforms: The "Visible Hand" of Public Coordination
Dominique Finon and
Fabien Roques ()
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Dominique Finon: CIRED - centre international de recherche sur l'environnement et le développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - AgroParisTech - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement
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The paper investigates how proposed reforms on policies to maintain generation adequacy and to encourage clean technology investments in a number of European countries, modify the role of the market. This is reduced as the government, regulator and system operator take on explicit responsibility through the introduction of capacity mechanisms and long-term support for clean technologies. We highlight the interaction of these mechanisms with the electricity market and we look at how they reallocate risks between generators, government and consumers. The different mechanisms offer varying degrees of autonomy to generators with regards investment decisions. Looking towards the future, the paper also explores how designs of mechanisms might move towards a technology-neutral mechanism in the long-run. This could involve the auctioning of long-term contracts for all types of existing and new capacities, whether it be low carbon or fossil fuelled.
Keywords: electricity markets; long-term contracts; Capacity mechanism; renewables policies (search for similar items in EconPapers)
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Published in Economics of Energy & Environmental Policy, The International Association for Energy Economics 2013, 2 (2), pp.107-124. ⟨10.5547/2160-5818.104.22.168⟩
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Journal Article: European Electricity Market Reforms: The "Visible Hand" of Public Coordination (2013)
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